Medicinal marijuana has become a controversial topic among Santa Clara government agencies. (Photo: Bob Young)

Santa Clara County’s new district attorney, Jeff Rosen, wants to shut down prosecution of medicinal marijuana dispensaries, saying they will no longer be a top priority. Nonetheless, the county’s narcotics squad plans to continue investigating them, putting the two agencies at odds.

In a video interview, Rosen told NBC Bay Area that closing dispensaries was “not something we’re going to devote more resources towards.” He also asked his new chief narcotics prosecutor, Jim Sibley, to research the state’s confusing medicinal marijuana laws and come up with a better, more refined approach.

“The office had no set policy related to medical marijuana law,” Sibley said in an interview, “and Jeff felt that it’d be more responsible to have a policy both for guidance for the attorneys within the office” and “as guidance for officers.” Rosen did not return phone calls and emails seeking comment.

But the Santa Clara County Specialized Enforcement Team—the squad that raided four dispensaries late last year—plans to continue to investigate, even if it will not conduct any more raids in the meantime.

“Well, who says we stopped?” asked Bob Cooke, head of San Jose’s division of the State Bureau of Narcotic Enforcement, which oversees the team.

“We’re all trying to figure out how to interpret these rules and what’s the right way to have these collectives,” he added. “The fact that we may not be hitting any of these places doesn’t mean we’re not still scrutinizing some of these operations.

“We can’t simply take a backseat when we have people calling and complaining about any criminal law violation.”

Doug Carter (right) with business partner Stephen Bishop at Angel's Care Collective, one of the dispensaries raided last year. (Photo: Dean Schaffer)

Studying California Laws

Discussing Cooke’s team, Sibley said, “Obviously they look to us for guidance, “but we don’t have any authority over them.”

Sibley added that he has been studying California’s laws and relevant court decisions, in addition to talking to police, members of the community and marijuana dispensary operators.

Much of the controversy revolves around whether state law allows dispensaries to accept money from patients in exchange for medicinal marijuana. Because the law prohibits dispensaries from making a profit, critics like Cooke say that simply accepting money for cannabis is illegal. Supporters argue that payment only reimburses rent and other costs.

Lawyers on both sides also argue over whether dispensaries can provide marijuana to anyone with a valid medicinal marijuana card who signs a dispensary’s membership form, or whether members must actively participate in and contribute to the operation.

Doug Carter, who runs San Jose’s Angel’s Care Collective, blamed the city for not passing local regulations clarifying the law.

California voters passed the state’s first medicinal marijuana law in 1996, and “the cities were told to create ordinances,” Carter said. “The only gray area is because of the city’s either arrogance or ignorance to not provide ordinances” after the initiative passed.

Cooke, however, was unambiguous. “Under the law, you cannot charge for marijuana.” What’s more, he added, “It appears that there are a lot of people profiting from selling marijuana.”

Questions Surround Police Meth Grant Money

His hard-line approach has made enemies among medicinal marijuana advocates. As a squad that enforces drug laws and includes officers from multiple police agencies, the group receives money from federal grants and other sources. In the midst of the raids last year, some advocates accused the team of misusing federal funds intended for fighting methamphetamines in the marijuana raids.

A memo from the district attorney’s office shows that, in 2010, the group received $117,560 in a federal grant to support “equipment, overtime, and training,” with an emphasis on “methamphetamine suppression, as well as drug-related violence suppression.”

The grant came up in the public comments portion of a San Jose City Council meeting last November. “Attacking collectives using funds to clamp down on illegal drugs such as methamphetamines is unconscionable,” said Paul Stewart, a representative of several local dispensaries.

Angel's Care was raided twice late last year, but Carter said his legal team is fighting the charges. (Photo: Dean Schaffer)

City Council Member Pierluigi Oliverio acknowledged the issue himself in the same council meeting. “I’ve understood that this is a federal grant that’s specific toward methamphetamines and guns,” he said, “but it seems as though they’ve been looking at the medical cannabis collectives.” He requested a report from city staff to clarify the source of the raids’ funding.

Oliverio later said in an email that he “wanted to quell the rumor if it was untrue, or if it was correct, get the answer out there.”

The city staff report, however, merely said the team is a “state-funded narcotics task force.”

Oliverio said the memo did not answer his question but that he would not pursue the point any further since Rosen’s office “will be offering guidance soon.”

Cooke forcefully rejected Oliverio’s comment. “He thought there was money being mismanaged,” he said, “but he’s never been here, he’s never called me.”

When asked about the federal grant, Cooke said, “that was for overtime or for costs investigating some of the other crimes.” He added that the team “has investigated a lot of serious crimes, besides the dispensaries,” including a number of methamphetamine cases. “There was definitely no misdirection of any funding.” He added, “That wouldn’t have happened. And I know it did not happen.”

Police Seize Assets at Dispensaries

But grants are not the only source of income critics target. The team also generates funding by taking or freezing money that officers believe is involved in drug crimes. This practice is known as asset seizure or asset forfeiture.

In a 2003 report from the California attorney general’s office, then-Attorney General Bill Lockyer wrote, “The goal of asset forfeiture is to remove the profits from those who benefit from illegal drug trade.”

When Cooke’s team raided Angel’s Care, for example, officers froze the organization’s bank accounts. Carter said that officers also took 120 pounds of marijuana. After police seize assets, the district attorney’s office can file a lawsuit against the assets themselves. If a court finds the assets did indeed play a role in the crime, the state gets to keep them.

The attorney general’s 2009 asset seizure report indicates that 65 percent of these forfeited assets go back to the law enforcement agencies involved in the seizure, “distributed in a manner that reflects the proportionate contribution of each agency.” This process is called disbursement. In other words, the more assets the agency seizes, the more money the agency gets back.

Attorney James Roberts, who represents several dispensaries in Santa Clara County, including Angel’s Care Collective, accused Cooke’s team of conducting raids to pad its budget.

“It’s essentially intended to be a profit-making organization,” he said. “If you look at what they take, over and over again those collectives that they’re raiding have money in the bank.

“There seems to be an emphasis on looking to sources of money as opposed to sources of criminal conduct,” he added.

The seizures have indeed been substantial. Sibley said police seized or froze almost $100,000 from the San Jose Patient’s Group and about $76,000 from Angel’s Care, not including any equipment seized as evidence.

The special enforcement team's website, SCCSET.com, does not reveal much about the team, which is not very well known in Santa Clara.

“My computers, my cash registers—anything that they could carry out of here, they took,” Carter said.

Since 2002, the state has disbursed more than $850,000 to the team—a little more than half of the total amount involved in the squad’s cases. In 2009, the group received about $11,000—a huge drop from 2002, when the agency that directly preceded it received over $270,000. The numbers have dropped almost every year since then. Statistics for 2010 are not yet available.

Sibley said the asset trial process can take anywhere from one to three years, but if the court finds the assets guilty, the team would likely get about $97,000 from these two marijuana dispensary cases alone—more than the amount it has received in an entire year since 2005.

Cooke denied Roberts’s accusations, pointing to their relatively small impact on the team’s budget. “The money is not very much at all,” he asserted. “Seized assets “cannot be used to supplant the budget.” Instead, he added, “It’s used for things like training, buying special equipment, or things that are needed for enforcement—usually for things that would not commonly be available to purchase out of the normal budget.”

Sibley said the prosecution of the dispensary cases is on pause while he works to refine the district attorney’s policies. In the meantime, however, all of the seized assets remain stuck in limbo.

“They’ve had our stuff for five months,” Carter complained. “Right now I’m guilty until proven innocent.”

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